ANALYSIS: Experts urge authorities to consider public interest in media deal review

By Shelley Shan  /  Staff reporter

Tue, Dec 04, 2012 - Page 3

Although the Fair Trade Commission (FTC) has yet to start its review of the sale of Next Media Group’s operations in Taiwan, media experts have asked the agencies in charge to consider the deal’s impact on the public interest.

Next Media finalized the sale of of its print publications — the Chinese language Apple Daily (Taiwan), Sharp Daily and Next Magazine — as well as Next TV in Macau on Tuesday last week.

The biggest controversy revolved around one of the investors, Want Want China Times Group chairman Tsai Eng-meng (蔡衍明), who owns a media conglomerate consisting of newspapers, magazines, cable television channels, a terrestrial television service and a cable television system.

Many expressed concerns that the deal would further expand Tsai’s media empire, and threaten diversity in the nation’s public opinion and media.

In addition, Tsai’s ability to manage media outlets was called into question.

Tsai has been quoted making pro-Beijing comments and had once said in an interview with the Washington Post that the number of casualties in the 1989 Tiananmen Square massacre have been greatly exaggerated.

A study by National Taiwan University professor Chang Chin-hwa (張錦華) showed that the number of news reports focusing on China in the China Times Group’s China Times, on China Television and on CtiTV increased greatly after the Want Want Group took over operations.

Chang’s study also showed that the group’s reports on China tended to highlight China’s economic prosperity and downplay any news that could be considered unfavorable to Beijing.

Based on the division of labor, any changes to a broadcast media management personnel need to be approved by the National Communications Commission (NCC), which oversees the operations of radio, television channels, cable television systems and telecoms carriers.

The NCC would review the sale of Next TV if the new management team files for change of management or the network’s operational plan.

With the majority of the sale involving the print publications of the Next Media Group, the case is to be reviewed by the Free Trade Commission, which would look into whether the merger of the two dominant players in the print media industry would create obstacles to fair competition.

However, the FTC is not equipped to safeguard the diversity of public opinion.

The Fair Trade Act (公平交易法), which the commission is charged with enforcing, regulates various practices of the market economy, but can not affect public opinion.

FTC Chairman Wu Shiou-ming (吳秀明) has said that the commission by law cannot use the diversity or concentration of public opinion as the main or sole criterion in its review of any case, nor has it ever used that criterion to review cases in the past.

However, Wu said that the commission could consider the merger’s impact on public opinion if it would indeed undermine consumers’ interests and impede the competition in the market.

Another problem would be the issue of time.

Wu has clearly stated that, by law, the commission has a maximum of 60 days to review the case, adding that the review process could not be extended.

Whether the commissioners would be able to thoroughly investigate and deliberate over the case during the stated period of time is questionable.

The NCC spent 20 months reviewing Want Want China Times Group’s purchase of cable television systems owned by China Network Systems, a case which was no less complicated than the Next Media deal.

National Chung Cheng University communications professor Lo Shih-hung (羅世宏) said that how the FTC defines the market affected by the deal would be key to its review.

The Fair Trade Act, he said, requires investors to report the merger to the authorities in advance if the merger would allow an enterprise to control one third of the market share.

“If [the FTC] only considers the print media, the merger of the Apple Daily [Taiwan] and China Times would account for more than 50 percent of the market,” Lo said.

“If they consider the television and print media markets, the market share of two newspapers would be lower,” he added.

Experts familiar with the operations of the FTC also told the Taipei Times that media concentration and its potential influence on public opinion “would not be an issue” if the FTC’s definition of the “media market” includes television, radio, print and online media.

Lo said that the deal could affect the interests of advertisers because it would enable the group to control advertising exposure with its access to two of the nation’s major newspapers.

Even if the NCC does not regulate print media, and Tsai does not hold any share in Next TV, Lo said that the NCC must still investigate whether the Want Want China Times Group has absolutely no affiliation with the television network, both editorially and financially.

“In Taiwan, television channels often pick up on news published in newspapers,” Lo said. “The Apple Daily and Next Magazine are not unimportant media outlets, and they can influence not only Next TV, but other television stations as well. Tsai may not hold any share in Next TV, but he indirectly influences television news through the control of these two popular publications,” Lo said, adding that Want Want China Times Group must prove that Tsai will not interfere in Next TV’s editorial and financial departments.

National Chengchi University professor Liu Chang-de (劉昌德) said that the focus of the review should be on preserving the diversity of public opinion.

“Opposing media monopolies does not necessarily mean that we are for free competition,” Liu said. “The result of free competition could be that consumers would not hear dissenting opinions and continue receiving shallow content.”

Liu said that the nation must implement a system to check and balance the power of consortiums, such as establishing stricter mechanisms to examine media mergers, asking media owners to stipulate their editorial guidelines and encouraging them to offer funding to reward extraordinary journalists.